I was wondering if housing that has gone sky high was included
in inflation. "Like most other economic series, the CPI views
housing units as capital (or investment) goods and not as
consumption items. Spending to purchase and improve houses and
other housing units is investment and not consumption." Rent
prices though are included in CBI because they are expenditures
that are "consumed" in current period of time.
NO they don't count housing because they consider it an asset -
remember they use some convoluted thing for housing inflation: They
ask random set of people the question, how much would you pay to
rent your equivalent house and they use that number? It's a fricken
made up number, it's ridiculous - it's called OER here's a
paragraph from an article
The cost of owned housing is less straightforward. What the
Bureau of Labor Statistics (BLS) is trying to measure with the CPI
is the cost of “consuming” housing as shelter every month. That’s
why home sale prices are not used. The BLS considers the home a
real estate asset and, therefore, an investment, not a consumption
good. Instead, the BLS uses an owner’s equivalent rent (OER). The
BLS estimates the OER by asking homeowners how much they could
charge to rent their home.
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I was wondering if housing
Posted by EdZ on 13th of Nov 2021 at 07:24 pm
I was wondering if housing that has gone sky high was included in inflation. "Like most other economic series, the CPI views housing units as capital (or investment) goods and not as consumption items. Spending to purchase and improve houses and other housing units is investment and not consumption." Rent prices though are included in CBI because they are expenditures that are "consumed" in current period of time.
NO they don't count housing
Posted by matt on 14th of Nov 2021 at 12:59 am
NO they don't count housing because they consider it an asset - remember they use some convoluted thing for housing inflation: They ask random set of people the question, how much would you pay to rent your equivalent house and they use that number? It's a fricken made up number, it's ridiculous - it's called OER here's a paragraph from an article
The cost of owned housing is less straightforward. What the Bureau of Labor Statistics (BLS) is trying to measure with the CPI is the cost of “consuming” housing as shelter every month. That’s why home sale prices are not used. The BLS considers the home a real estate asset and, therefore, an investment, not a consumption good. Instead, the BLS uses an owner’s equivalent rent (OER). The BLS estimates the OER by asking homeowners how much they could charge to rent their home.